Nearly-complete coal plants won’t be affected by EPA CO2 rule

Representatives of several nearly-completed coal power plants in the Midwest and Mid-Atlantic said March 28 that they don’t expect the U.S. EPA’s just-released standard on carbon dioxide to have any impact on their new units.

Coal power supporters have said that EPA set the CO2 standard so low that only combined-cycle natural gas plants appear ready to meet it. But EPA’s first Clean Air Act standard for carbon pollution won’t affect existing units already operating or units that will start construction over the next 12 months, the agency said in its March 27 news release.

As a couple of public affairs people noted, these plants were licensed and under construction years before EPA released its greenhouse gas emissions rule.

A spokesperson with Dominion Resources (NYSE: DOM) said the EPA standard should have no impact on the company’s Virginia City Hybrid coal-and-biomass plant in Wise County, Va. The 585-MW, $1.8bn project is expected to begin operation in early June.

Similar statements were made on behalf of a Duke Energy (NYSE: D) spokesperson on behalf of that company’s Edwardsport coal gasification power plant in Indiana as well as its new 825-MW Cliffside coal unit in North Carolina. Both those plants are expected to open within a few months.

Like Dominion’s Virginia Electric Power, Duke subsidiaries in Indiana and the Carolinas agreed to idle several older, more emitting coal units prior to winning approval for the new coal plants.

A Duke spokesperson said that Duke has been studying the potential for carbon capture and storage at the Edwardsport integrated gasification combined-cycle plant. There are, however, no current plans for CCS at either the Indiana or North Carolina projects, the spokesperson said.

Dominion’s Virginia City project has space set aside for carbon capture and has made plans to explore the idea in cooperation with Virginia Tech’s Virginia Center for Coal and Energy Research.

Another plant that is scheduled to open soon is the 1,600-MW Prairie State coal plant in southwestern Illinois. Initial development of the mine-mouth Prairie State facility was done by Peabody Energy (NYSE: BTU) a decade ago. Today Peabody is listed as one of nine owners of the Prairie State complex with the largest stake in the venture held by American Municipal Power (AMP).

While these plants might see little impact from the CO2 standard, if it survives legal challenge, the picture is less clear for the planned 582-MW Ratcliffe IGCC plant that Southern Co. (NYSE: SO) subsidiary Mississippi Power is developing in Kemper County, Miss. That plant, which would use locally-mined lignite, would however employ carbon capture and plans to then sell the CO2 for possible enhanced oil recovery.

“We are reviewing the complex and lengthy proposal to evaluate its potential impact,” said a Mississippi Power spokesperson. “Upon commercial operation, the Kemper IGCC Project will capture 65% of the carbon dioxide it produces,” he added.

A Bernstein Research analysis on March 28 notes that EPA has exempted what it calls “transitional sources” or power plants that have already received their pre-construction air permits under the Clean Air Act. These projects appear to be in good shape so long as they start construction by March 27, 2013, Bernstein said.

“Thus, of the 16 GW of coal fired capacity currently in advanced development, we calculate that some 11 GW, or almost three quarters, are transitional sources,” according to Bernstein Research.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.